A top 20 investor in BT Group (LON:BT.A) has urged the company to line up a replacement for its chief executive Gavin Patterson, The Telegraph has reported. The calls follow an accounting scandal at the telco’s Italian division earlier this year.
BT’s share price has been little changed in London in today’s session, having added 0.08 percent to 294.57p as of 13:05 BST. The stock, however, is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.53 percent higher at 7,348.71 points. The telco’s shares have lost more than a quarter of their value over the past year, and are down by nearly a fifth in the year-to-date.
The Telegraph reported over the weekend that a top BT investor, who controls a stake in the telco worth hundreds of millions of pounds, had said that his fund wanted the group to be led by “an external candidate with a regulatory and preferably also an engineering background”. The shareholder pointed out that “with the benefit of hindsight, Gavin Patterson was not the right man for the job”.
The comments came after the telco was forced to write down the value of its Italian business by £530 million earlier this year following the discovery of inappropriate accounting behaviour at the unit. The group is further under regulatory pressure to improve performance at its network division Openreach.
“A lot of what has gone wrong has not been Gavin’s fault but we’d like to see progress on a process and new leadership in the next year,” the investor pointed out. The Telegraph, however, also quoted BT’s outgoing chairman Sir Mike Rake as pointing out that there was ‘strong support’ for the current chief executive.
“It is very much in the interests of BT and its stakeholders that he stays in his to lead the company,” he added. The telco’s incoming chairman Jan du Plessis, who is due to take the helm in November, meanwhile said that he looked forward to “supporting Gavin and his management”.